Following suit with the rest of the world, many manufacturers are turning to robotic automation in their facilities to increase production volume, improve quality, and lower costs. But, those that haven’t yet leaped into the world of robotic automation might be concerned with the cost, especially after recovering from abrupt changes in the economy. We’ll review the costs you need to consider before taking advantage of this beneficial long-term investment in your facility.
What is the Value of Robotic Automation?
Implementing robotic automation is one of the smartest investments a manufacturing company can make in the current economic landscape. Because your customers want their products faster, better, and cheaper, you are tasked with finding a way to deliver fast while upholding the highest level of quality – and before your competitors can do it first.
Robotic automation allows your company to do the job of a highly skilled laborer for a fraction of the cost that can operate 24 hours a day, seven days a week, during holidays, and without breaks. Moreover, robots can resolve several different manufacturing needs and can be fully customizable.
Whether you’re looking for spin welding systems, a pick-and-place machine, or metalworking systems, robotic automation can fit seamlessly into your manufacturing and production operations.
Robotic automation is industry agnostic, too. It can be especially lucrative for the medical and pharmaceutical industries, as the production rate for high-quality medical-grade products such as gloves and masks has skyrocketed since COVID-19.
Luckily, even industries with low production volumes and high product variability like the aerospace industry can see massive benefits with robotic automation. Take Boeing, for example, which implemented a panel assembly line that uses automation to drill holes and install fasteners in wings. This reduced scrap waste by 66%, allowed the wing to be produced 33% faster, and reduced the number of injuries by half (4).
Factors to Consider Before Purchasing
While there are several benefits to investing in automated solutions, and the future cost-savings might be clear, you likely need to understand the cumulative upfront costs. To make this investment as profitable as possible, consider the following factors when engaging in budgeting and strategic planning efforts for your future robotic automation needs:
1. Cost of Machines
One of the most common questions asked when considering whether to invest in robotic automation is, “what is the equipment’s upfront cost?”. Leadership wants to know the cold, hard cost of an automated machine. While it is only one pillar of the investment equation, it is usually the primary budgeting factor because it requires the most financial resources upfront.
Although the total cost can depend upon how many robots you need and what you’re using them for, the average cost for new equipment can range widely from $28,000 for a standalone robotic arm to hundreds of thousands of dollars and up for a complete industrial automation system.
While that’s only an approximation, it’s an important consideration when considering robotic automation. Fortunately, there are alternatives to help offset the initial cost, including purchasing used equipment, taking advantage of promotional discounts for multiple robots, and utilizing tax breaks.
2. Cost of Design and Build
Because the upfront cost is only one component of purchasing robotic automation equipment, it’s also critical to examine the cost of the designing and building aspects of the purchase. Note that the lead time to design and build a machine can take time, ranging anywhere from 20 to 55 weeks on average, depending upon the robot’s size and complexity.
3. Cost of Maintenance
Maintenance and auxiliary costs are the other pillars of the robotic automation equation. Maintenance is a cost all leadership and executives need to consider.
When robots are appropriately maintained, repaired, and serviced, their production life can be extended by many years before needing to be replaced. You may consider using a preventative maintenance checklist or keeping your equipment on a regular maintenance schedule to advert any more significant issues that could shut equipment down or cut into your profits.
Luckily, many robotic automation investors take advantage of savings compared to human laborers and soon notice that programming and maintenance costs are lower than training and maintaining operators.
4. Return on Investment
There is no doubt that the leap into robotic automation needs to be worthwhile. The most important question asked is usually, “when can I see a return on investment?”. While some decision-makers may want to see an ROI within two years, it’s imperative to consider all the ways your automation equipment will work for you over the long haul.
Let’s say you purchase a medium-sized robot for material handling applications. Taking into account the energy and power needs, you can approximate the cost to operate per hour. When you compare that cost to human labor, especially over the equipment’s lifetime, the differences are often staggering, and the math tends to speak for itself.
Most business leaders would agree that they would much rather invest in something that can operate for 75 cents an hour uninterrupted for the equipment’s lifetime than pay for a human laborer for dozens (if not a hundred) times that amount. Humans require breaks, vacation, and are prone to error and injury, too.
In addition to the labor savings, let’s take into account the production gains. For example, this custom automated glass bottle loading cell can pick and place bottles into boxes at a rate of 300 parts per minute – no small feat for a human laborer. Not only can this equipment do the job faster, but it can also do it without material waste.
But with all considered, you likely still want a calculation that is accurate as possible when determining robotic automation cost. A simple way to calculate your specific ROI is to use an ROI calculator. Simply put, this is an equation that conjunctively considers several variables in your ROI calculation, including total system cost, utilization rate, current labor costs, and anticipated labor cost with the robotic system(s). That way, you can plug in your unique costs and proposed resource allocations and obtain a more realistic approximation of your robotic automation cost.
At SDC, we know that robotic automation cost is top of mind for manufacturing leadership and executives – they want to know that robotic automation will be a lucrative and profitable venture for many years to come. Our team of experts knows how important it is to have efficient, robust, and reliable robotic equipment that can benefit your bottom line for years to come. No matter the industry or complexity, we can create custom automation solutions that fit your unique needs. Contact SDC today to see how we can help you improve manufacturing operations through robotic automation, and be sure to also check out some of our past projects.